Prediction market liquidity explained: how depth, spread and slippage set what a trade really costs
What liquidity means on an order book
Every Kalshi market has a Yes side and a No side, each with its own bids and asks. Kalshi's help center defines a resting order as an offer to purchase contracts at a certain price that is not matched immediately, and the book shows the quantity available at each price. The best bid is the highest buy price and the best ask is the lowest sell price. The gap between them is the spread; the quantity sitting at each price is the depth.
The two sides are linked. In Kalshi's example a bid of 26 cents for No is effectively the same offer as an ask of 74 cents for Yes, because the two settle the same contract: Yes ask equals $1.00 minus the No bid. A thin book shows up as a wide spread, small quantities at the best price, or both.
The three costs of taking a price
Using Kalshi's example book, with a Yes bid of 71 cents and an ask of 74 cents, here is what 100 contracts bought at the ask cost beyond the headline price.
| Cost | What causes it | 100 contracts at 74 cents |
|---|---|---|
| Spread | Buying at the 74 cent ask instead of the 72.5 cent midpoint | 1.5 cents a contract, $1.50 |
| Taker fee | 0.07 x contracts x price x (1 minus price), rounded up | About $1.35 |
| Slippage | An order bigger than the quantity at the best price | None here; Kalshi's 1,000-contract example costs about $10 extra |
Spread plus fee comes to about $2.85 on 100 contracts, roughly 3.9 percent of the $72.50 midpoint value. The fee formula is from Kalshi's schedule, effective July 7, 2026. The fee is highest at 50 cents, where 100 contracts cost $1.75, and falls to $0.63 at 10 or 90 cents.
The round trip: buy at the ask, sell at the bid
The cleanest way to see liquidity is to buy and immediately sell. Kalshi charges the taker fee on quick orders and on sell orders that match at once.
| Step | Price | Cash |
|---|---|---|
| Buy 100 Yes at the ask | 74 cents | -$74.00 |
| Taker fee on the buy | 0.07 x 100 x 0.74 x 0.26 | -$1.35 |
| Sell 100 Yes at the bid | 71 cents | +$71.00 |
| Taker fee on the sell | 0.07 x 100 x 0.71 x 0.29 | -$1.44 |
| Net result | Nothing changed in the market | -$5.79 |
The $5.79 loss is $3.00 of spread and about $2.79 of fees, 7.8 percent of the $74 spent, and the contract price never moved. That is the hurdle a trader has to clear before being right about the event pays anything.
Slippage: when your order is bigger than the book
A quick order on Kalshi buys a set number of contracts immediately at the best available prices, and a large one can fill across several levels. Kalshi's own example fills 1,000 contracts as 500 at 10 cents and 500 at 12 cents, an average of 11 cents. The best ask was 10 cents, so the order paid $110 instead of $100, an extra $10 or 10 percent. Kalshi's article does not describe any price cap on quick orders, so check the average price shown in the order panel before confirming.
Market order or limit order
A limit order buys or sells at your price or better. Anything not filled immediately rests on the book. Kalshi says limit orders are charged only on the portion that executes at once, and resting orders are fee-exempt; its fee schedule sets the maker multiplier at zero by default, though a few series, such as combos, set a maker fee. In the example above, a bid at 72 cents that fills saves 2 cents a contract against the 74 cent ask, $2.00 on 100 contracts, and avoids the $1.35 taker fee in a market with no maker fee. That is about $3.35 better than taking the ask. The catch is that nothing guarantees a fill, and if the market moves away you either chase it or miss the trade.
How to read depth before you trade
- Check the spread in cents. A 1 cent spread costs half a cent a contract against the midpoint; a 3 cent spread costs 1.5 cents.
- Compare your size with the quantity at the best price. If you are larger, expect slippage.
- Work out the fee at your price. It is largest near 50 cents and smallest near the extremes.
- Ask whether you need to trade now. If not, a resting limit order can avoid both the spread and the fee.
Method and limits
The dollar figures are our arithmetic from Kalshi's published formula and its help-center example, ignoring the centicent rounding Kalshi applies, so actual fees can differ by a fraction of a cent. The help-center text labels the Yes bid and ask in a way that appears swapped against its own numbers; we use the reading in which the best bid (71 cents) is below the best ask (74 cents). Fee rules vary by series and change over time, and Polymarket and other venues use different structures, so check the current schedule and the order panel for the market you trade.
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Frequently asked questions
What is the spread in a prediction market?
The spread is the gap between the best bid, the highest price a buyer will pay, and the best ask, the lowest price a seller will accept. In Kalshi's example the Yes bid is 71 cents and the ask is 74 cents, a 3 cent spread.
What is slippage?
Slippage is the extra cost when an order is larger than the quantity available at the best price and fills across several price levels. Kalshi's own example fills 500 contracts at 10 cents and 500 at 12 cents, an average of 11 cents.
Do resting limit orders pay fees on Kalshi?
Orders that rest on the book are not charged the taker fee. Kalshi's fee schedule sets the maker multiplier at zero by default, so most markets have no maker fee, though some series such as combos set one.
Why is the Kalshi fee highest near 50 cents?
The taker fee is 0.07 times contracts times price times one minus price, and the price times one minus price term peaks at 50 cents. On 100 contracts the fee is $1.75 at 50 cents and $0.63 at 10 or 90 cents.
Sources
- Kalshi Help Center, The orderbook
- Kalshi, Fee schedule, effective July 7, 2026
- Kalshi News, Order types
- BetG8, What the spread costs on prediction markets
18+ only. Prediction market contracts carry real financial risk. This page is analysis, not legal, financial or betting advice. If gambling stops being fun, help is available at 1-800-GAMBLER.